¡Ay, Caramba! Saga of The Versace Mansion Turning Into Telenovela

Cast Includes A Tycoon, a Ponzi Schemer, Jordache Jeans Maker and a German Bank

Steve Dibert, MFI-Miami

Casa Casuarina, the former home of the late fashion guru, Gianni Versace who was gunned down at it’s main gate in 1997, is embroiled in a controversy over who is entitled to foreclose and receive the proceeds from the foreclosure sale.

versace-mansionThe 23,000 square foot mansion in the heart of South Beach has  a 54-foot-long pool lined with mosaic tiles and 24-karat gold. They will acquire millions of dollars’ worth of Italian furniture — one room’s windows alone are framed by $250,000 in silk-and-velvet drapes.  The mansion also includes a boutique hotel with 10 suites, British-trained butlers and a restaurant that serves cocktails in Versace martini glasses.

It’s current owner, telecom mogul Peter T. Loftin, who bought the property in 2000 from the grieving Versace family for $19 million and did a $20 million renovation put the property   Loftin allowed the $25 million mortgage on the property to go into default.

According to the New York Times,  Loftin said he had stopped paying his mortgage after 2010 when he realized the loan documents at closing did not reflect his final agreement with WestLB.

The owners of the debt,  VM South Beach, the a real estate holding company owned by the Nakash family, owners of jean manufacturer, Jordache Enterprises, filed a federal foreclosure lawsuit in December 2011 against Casa Casuarina and Mr. Loftin for failure to pay the $25 million mortgage that the Nakashes bought from German Bank, WestLB.

The New York Times wrote,  ”He (Loftin) has alleged a conspiracy involving the Nakashes and the German bank. “They bought a fraudulent note,” he said of the Nakashes. “They knew it was fraudulent.”

Since the dispute began it was discovered that three years worth of property taxes are owed to Miami-Dade County.  Loftin is in a dispute with his tenant, the hotelier Barton G. Weiss, claiming he owes the taxes to Miami-Dade County.

Adding to this drama is a claim by a bankruptcy trustee overseeing what’s left of Ponzi schemer Scott Rothstein’s empire. Rothstein who is now in federal prison, allegedly held a minority ownership in the mansion.   Herbert Stettin, the trustee overseeing Rothstein’s defunct law firm, Rothstein Rosenfeldt Adler, is demanding that money back.   Stettin is alleging that VM South Beach, should not receive rent income from the property until the disputes are cleared up.

Loftin originally put Casa Casuarina on the market for $125 million in June and lowered it to $100 million in November with a heavily promoted video (above) by the “The Jills” of Coldwell Banker in Miami Beach.  There are serious issues facing a potential buyer as Alexei Barrionuevo points out in the Times,

“But even if the new owner was willing to pay a premium to acquire the mansion free of legal encumbrances — which one lawyer estimated could cost around $40 million — its current tenant, Mr. Weiss, would have to be persuaded to leave. He operates the boutique hotel, the Villa by Barton G., on the property, which rents one-bedroom suites with “custom” king-size beds for $2,250 a night. Mr. Weiss has a lease stretching to 2020, with an option to renew for 10 more after that.

The Nakashes don’t exactly see that kind of arrangement justifying a $100 million price tag and accuse Loftin of trying to gain a tactical advantage to delaying or stopping the foreclosure, “The Versace mansion has been listed for an outrageously inflated price for the main purpose of trying to gain some tactical advantage in ongoing litigation.”

 

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